The document discusses the options of being a for-profit organization, non-profit organization, or operating under fiscal sponsorship. It notes the increasing number of non-profits and stagnant philanthropic funding. Key factors to consider include legal structure, taxes, funding eligibility, and administrative requirements. Fiscal sponsorship can provide tax-exempt benefits temporarily but the sponsor retains control of funds. The goal is to help organizations make an informed decision by understanding the pros and cons of each model and preparing a clear vision and plan.

1. To be or not to be ?
JAMES GRACE
Executive Director, Arts and
Business Council
ANITA LAURICELLA
Interim Executive Director,
StageSource
October 26,2010

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To be or not to be
Introductions

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To be or not to be
Tonight we will review
– Tonight’s goal
– Your vision
– The local environment
– The different organizational models-
pros and cons
– How to prepare

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Goals: to assist you in making an
informed decisions
To provide information
Identify resources
Get you started
Key assumptions
No right answer
Understanding your vision is critical
Needs change overtime
To be or not to be

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The local environment
– Increasing number of nonprofits
– No corresponding increase in philanthropic
funds
# of local theatre companies
– StageSource currently has 250 organizational
members
– Directory of Mass Theaters identifies 293
To be or not to be

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Your vision
– Describe your current program
– Where do you want to be in five years?
– And in ten years?
To be or not to be

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For-Profit: The Benefits
– Less oversight
– Easy to start
– Easy to dissolve
For-Profit: The Downsides
– Expense
Filing fees
– Taxes
– Limited access to charitable funds/grants
To be or not to be

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Not-for-profit: The Benefits
– Tax exemption
– Direct access to funding
– Liability protection
– “Halo” effect
Not-for-profit: The Downsides
– Oversight
– Purpose & activity restrictions
– Dissolution restrictions
– Administrative time and energy
To be or not to be

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 The Non-Profit Corporation: Overview
– Separate Legal Entity
– State Law Governs Incorporation and Operations
– Purpose/Mission Requirement
– Limited Liability
– Perpetual Life
– Governed by Articles of Organization and Bylaws
– Incorporation Does Not Guarantee Tax Exemption
To be or not to be

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 A Third Option: Fiscal Sponsorship
(Fiscal Agency):
– Benefits:
 Operate as a program of existing 501(c)(3) organization
 Use of parent’s tax-exempt status
 Administrative services/technical assistance
 Time to prepare for incorporating, seeking tax-exempt
status
– Downsides:
 Sponsor controls funds
 Sponsor may charge fee
 Mission match requirement
To be or not to be

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To be or not to be
 How to prepare
1. Be clear on your vision
2. Talk with your colleagues
3. Identify and talk with your supporters
4. Get technical support
5. Make a plan
6. Build your team

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To be or not to be
Resources
– Local
StageSource
– www.stagesource.org
A&BC/Volunteer Lawyers for the Arts
– www. www.vlama.org
Boston Dance Alliance
– www.bostondancealliance.org
– National
Fractured Atlas
– www.fracturedatlas.org

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To be or not to be
Questions